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TMI Blog1988 (5) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... s under : "1. Rule IBB being procedural is retrospective in operation; 2. Property at Plot No. 614-B, being residential property should be valued as per Rule IBB; 3. Deduction under section 5(1)(iv) be given. 4. Value of shares be computed as per Rule 1D as interpreted by the Gujarat High Court in the case of CWT v. Ashok K. Parikh [1981] 129 ITR 46." Since ground Nos. 1 to 3 are inter-related and involve common facts they are being considered together as hereunder :- At the well-known 'Ellise Bridge' of Ahmedabad there lies the popularly called 'Panchvati Gulbai Tekra Area' falling in T. P. S. Nos. 3 20. This area is inhabitated by persons belonging to upper middle class and all civic amenities like schools, hospitals, offices, markets, cinemas, etc., are available to them nearby. A.M. T. A. buses and auto rikshaws provide means of surface communication. In this 'Panchavati' area there situates a residential building popularly known as 'Ram Niwas', on the 80 or 100 wide TPS Road Called Sheth Chimanlal Girdhan Dass Road. We were informed at the time of hearing that this 'Ram Niwas' belongs to the brother of the Karta of the assessee-HUF and the karta as well as othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n raised in sufficient detail allowed the assessee to take up additional ground and finally accepted its claim in that behalf. She accordingly directed the WTO to value this property as per Rule 1BB. That part of her order makes the subject matter of ground Nos. 1 to 3 of revenue's appeal before us. 6. We heard the parties at sufficient length and went through the record as was placed before us. 7. No doubt the learned Dr vehemently urged that Rule 1BB was brought on the Statute Book w.e.f. 1-4-1979 and therefore should not be deemed to apply to cases involving periods prior to that in so far as we are concerned the point in issue stands concluded in assessee's favour not only by special Bench decision in the case of Biju Patnaik v. WTO [1982] 1 SOT 623 (Delhi) but also by Gujarat high court decision in the case of CWT v. Shri Kasturbhai Mayabhai [1987] 164 ITR 107 wherein it has been held that the said rule being procedural in nature was mandatory in character and retrospective in effect covering the cease pertaining up to A. Y. 1965-66. We therefore find no merits in ground No. 1 and reject it. 8. Now coming to ground No. 2 we find that it is not being challenged by Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rage of assessee's household goods and for residence of its servants. No such facts are obtainable from the order of the Tribunal dated 16-10-70. since facts materially differ the said order of the Tribunal does not come in our way. We hold that the assessee has rightly been declared entitled to exemption u/s 5(1) (iv) by the learned CWT (A) and dismiss this ground as well. 11. Incidentally, ground No. 1 in assessee's cross objection relates to the points discussed hereinabove. In view.of out above conclusions assessees' apprehension of withholding applicability of the provisions of Rule 1BB to the valuation of this property becomes unrealistic and unfounded. that ground becomes infructuous and shall be deemed to have been dismissed as such. 12. coming now to the last ground i.e. No. 4 relating to the valuation of unquoted equity shares of certain private companies we are of the opinion that the learned CWT (A) has committed no wrong in directing the WTO to value such shares as per principles laid down by Gujarat High court in the case of CWT v. Ashok K. Parikh [1981] 129 ITR 46. We dismiss this ground also. 13. Assessee's cross objections. As stated above ground No. 1, com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sales instances considered by A. V. O. were not indicative of fair market value of the property that the objections pointed out by Registered valuer Shri K. R. Amin, were not properly considered and appreciated by the authorities concerned and that the valuation as returned by the assessee should have been adopted. It was further submitted that the sale instances pointed out by the registered valuer should have been considered as indicative of fair market value of the property in question. It was also pointed out that land rate adopted for F. P. No. 503 (situated by the side of Nagri Eye hospital) by the Tribunal in the order cited officers good guide for valuing the property in hand. On the contrary, the land rate adopted by the CWT (A) were excessive, contended Mr. Talati. The learned DR, on the other hand, supported order under appeal. 15. After having considered there the rival submission of the parties and after having gone through the valuation reports of the Registered valuer as well as of the A. V. O. we have felt convinced that the learned CWT (A) has hardly left any material point having any bearing on valuation of this property, for out much sympathetic.consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situated at a distance of about 750 mtrs. that case was situated at a distance of about 750 mtrs. law from the present property. For the obvious dissimulate of facts that order makes no guide for valuation in this case. 18. Keeping in view all the facts and circumstances attending on the valuation of this property we think it would meed the ends of justice if the valuation, fixed by the learned CWT (A) for various years, is reduced by Rs. 5 per sq. yd. for each of the years under consideration. We do so and modity the order of the CWT (A) to that extent only. 19. In the result the appeals preferred by revenue are dismissed while the appeals preferred by the assessee are partly allowed to the extent mentioned above. Per Shri R. M. Mehta, Accountant Member- I have perused the order of my learned Brother but find myself unable to agree with his views and consequent decision in WTA Nos. 1319 to 1323/Ahd/1983. After receiving his order I have discussed the matter with him to enable us to reach unanimity but having failed in doing so, I have to perforce write a dissenting order. 2. The facts have been narrated in detail by my learned Brother hence I propose to mention only the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depth also "This land contains a small ordinary type of residential structure and that too right at entry of the entire plot as shown in the accompanying plant No. 1. Even the small frontage of only 54'-O" available to the extensive plot of land (Area : 4182 sq. yds.) in this case is materially blocked by the aforesaid old type of structure and as such creates substantial encumbrance on the entered land. "At least, in this particular case, when the ordinary type of small old structure with an out dated design is so oriented on the plot (right at its entry) by which the small available frontage of only 54'-O" is even substantially blocked as can be seen from the accompanying Plan No. 1 it would have considered the value to the said small structure as value of materials on demolition or scrap value. The small structure substantially members the entire land admeasuring 4182 sq. yds. of the assessee's property. Any willing and prudent purchaser of this property would consider the worth of this structure as value of material on demolition or scrap value in view of its condition, the peculiar orientation and its income fetching capacity. Only then, he would pay the market value of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinary structure like that of the assessee, the learned A. V. O. brings that structure to Ahmedabad and tries to work out the reinstatement cost by adopting some multiplier which he prefers to call the cost index for the city of Ahmedabad". "In view of my detailed discussion and observation for the strange method adopted by the learned A. V. O. even for the estimation of the reinstatement cost new of the ordinary structure of the assessee's property for each of the assessment year under reference, I am to state that not only the said estimation is exorbitant but is arbitrary also and can have no justification so for as the ordinary structure of the assessee is concerned. In any case, so far as this property is concerned as stated before, this ordinary out dated structure substantially encumbers the entire land admeasuring 4182 sq. yds. and is worth value of materials on demolition. Under the circumstances, the learned A. V. O. is requested to consider all my aforesaid observations and findings for his estimation of the fair market value of the assessee's very awkward-shaped property for all the 5 assessment years under reference for the sake of justice. The fair and reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Wealth-tax Act, 1957 which reads as under : "2. (e) 'assets' includes property of very description, movable or immovable but does not include, - (1) ................................... (i) .............................. (ii) any building owned or occupied by a cultivator of or receiver of rent or revenue out of, agricultural land : PROVIDED that the by building is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of rent or revenue by reason of his connection with the land requires as a dwelling house or a store house or an out house;" 14. We are on the other hand, concerned with the provision of section 5(1)(iv) which at the relevant time stood as under : "One house or part of a house belonging to the assessee exclusively used by him for residential purposes." It is apparent that the assessee does not fulfill any of the conditions laid down bisection 5(1)(iv). There is no 'house' in existence and accordingly the second condition of residence must remain unfulfilled. the reliance on the Calcutta high court decision is futile since the issue involved was entirely different and so are the provision of sections 5(1)(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed in the order of the learned Judicial Member it was a rectangular plot of land on which there are certain construction and the dispute is regarding that structure. The assessee had claimed that in respect of this structure. The assessee had claimed that in respect of this structure he should be granted exemption u/s 5(1) (iv) of the wealth tad act and the value of this property should be determined under Rule 1BB which has been prescribed for the valuation of residential properties. The built up area on the two follows was equal to 265 sq. yds. and it had paralleled shutters, cement plastered and kota stone floorings. there was a terrace also and there were sanitary installations and connection with sewage line. It was stated by the assessee that this structure was being used.for storing the assessee's that this structure was being used for storing the assessee household goods as well as for the residence of its servants and their families. As it was close to the residential structure it was convenient for the assessee to use this additional space as part of his residential house using it for goods and servants. 3. In the earlier years the value of this structure had been ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lidated Tea and Land Co. (India) Ltd. and held that this structure should be treated as a house. Referring to the earlier years order of the Tribunal, the Judicial Member observed that there appeared to be some constructions in 1965 which had changed the position. For this year it was a double storeyed buildings having a garage and he used as the residence of the servants and their families and also keeping the additional household goods of the assessee. These were additional household goods of the assessee. These were additional facts as a result of which he justified the departure from the earlier years' orders. He therefore, held that exemption u/s 5(1)(iv) was allowable. 7. The learned Accountant member, however, referred to the order of the Tribunal in the earlier year where the claim of the assessee u/s 5(1)(iv) had been rejected on the ground that there was no house as such but only a few sheds. He also referred to the fact that there was no change in the property and the additions which were made was only in 1970 which was after the years under consideration. He also made reference to the report of the Valuation Officer where he had pleaded for valuing the property on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so relied on the stand of the Department that Rule 1BB was not retrospective in operation and applied only after it was brought on the statute book and not for the period prior to it. 9. The learned counsel for the assessee, on the other hand drew my a attention to the nature of the construction and pointed out that a plinth area of the house on the first and second floor was 220 sq. meters which was sufficient for the purpose of being used as a residential house of the assessee. It is true that the assessee or the members of his family were not staying in this structure but it was being used for his servants and for the storing his household goods. He admitted that the property was constructed in 1936 but the full facts had not been brought out before the Tribunal in the earlier year. In 1965 its expected future life was more than 40 years and, therefore, it was in a fairly good condition for being used as a residence. He also submitted that where a house is used for the residence of the servants or for keeping the household goods is also a residential house and nothing else. Relying on the order of the Judicial Member he pointed out that it was a double-storeyed structure with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Judicial Member. The earlier year's order of the Tribunal is certainly against the assessee but it appears that full facts had not been brought out in that year and it had not been mentioned that it was being used as a residential house of the servants and for keeping the household goods. It may be mentioned that in the earlier year the value of the structure was taken at Rs. 8,000 whereas in this year the value has been shown at much more and at the instance of the Departmental Valuation Officer the Wealth-tax Officer had determined the value at more than Rs. 1 lakh. In respect of such a structure which had the necessary sanitary fittings and other facilities for residence there may not be any objection for treating it as a house. I am also of the view that user for one's own servants for their residence can be treated as user for residential purposes as well-to-do people decided on keep servants in their houses. It is admitted that the house has not been let out and the assessee was not obtaining any other income out of this house. If the house had been used for people other than domestic servants or for storing goods other.than the household goods an argument could be rai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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